Property Mortgage Trends in Bengaluru and Telangana

Affordable Housing May 12, 2022

The mortgage market in Bengaluru and Telangana has witnessed an uptick in registered mortgage transactions in the January - March quarter (Q1) of 2022, maintaining momentum from the last quarter. Favorable demographics, improved affordability of residential properties and historically low mortgage rates are pushing the demand for home loans. Hyderabad was an exception to this trend, with it being the only geography explored to have seen a downturn compared with what was seen last quarter. Telangana state government’s recent decision to increase registration charges might be a factor to take into consideration while evaluating Hyderabad's decline in mortgage volume [1].

The continued growth in demand for home loans in Bengaluru, however, can be attributed to the recent decision by the government of Karnataka to extend the time period of reduced property guidance values by an additional 3 months [2].

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The overall market in Bengaluru and Telangana - which is taken to be Warangal and Hyderabad - saw an increase of almost 30% QoQ. Registered mortgage transactions in Bengaluru, however, witnessed an increase of 19.71%. Affordable Home Loans (ticket size < Rs. 45 Lakhs) remained an important component of home loans, contributing the greatest share in all geographies considered.

RBI’s recent decision to increase interest rates, reflected in interest rates charged by financial institutions, can be predicted to have an impact on these figures with time [3].

Among financial institutions, State Bank of India, ICICI Bank, HDFC, and Tata Capital continued to be the preferred options in terms of the loans disbursed throughout the geographies observed.

Total Transactions Across Geographies Observed

Bangalore was seen to have the highest volume of transactions in both quarters observed, followed by Warangal and then Hyderabad.

Affordable Segment Continues to Drive Mortgage Sales in Bengaluru

Bengaluru saw a predominant share of mortgages taken by the Affordable segment, with an average share of 62.40% in Q1 2022.

Preferred Financial Institutions by Type in Bengaluru

Looking at the preferred options for financing, it is seen that State Bank of India, HDFC Bank, LIC Housing Finance and Can Fin Homes are the leading institutions for mortgage transactions in Public Banks, Private Banks, Home Finance Companies, and Non-Banking Finance Companies (NBFC's) respectively.

Contextualizing further, it is seen that the biggest lender for the Affordable segment across all types is State Bank of India, with 958 crores lent cumulatively in the segment. The same is also seen for the Mid - Segment, with 1716 crores lent cumulatively in the segment. The premium segment continues the trend with State Bank of India seen to have lent 1639 crores in the segment, more than any other financial institution.

Banashankari and Laggere Saw the Most Number of Mortgage Transactions in Bengaluru

Banashankari was the leading locality in terms of transaction volume in Q1 2022 with 352 registered transactions. Other prominent localities for Bengaluru were Laggere and Horamvu, making up for the bulk of mortgage activity in Bengaluru.

Get an in-depth view of all regions explored including preferred financial institutions by type, and segment wise breakdown of transactions over time and by localities, among other key insights in TEAL Analytics’ full report.

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